Japan - May 2020

S P OT L I G H T
Savills Research

Tokyo Periphery andRail Transit©ESR LTD

Tokyo Periphery and Rail Transit

Investment opportunities may emerge
beyond central Tokyo
Summary• Land prices at many station-side
areas on the Tokyo peripheryhave already surpassed 2008
levels and, in many cases, haveseen stronger growth than key
hubs in the central five wards.
•P opulation growth in Greater
Tokyo has outperformed
forecasts based on the 2015
census, with population
estimates for most wards andcities already exceeding thelevels forecasted for October
2020.
•A nnual surveys of Greater Tokyo
residents demonstrate a strong
interest in peripheral railway
hubs, with the Yokohama,
Kichijoji, Ikebukuro, and Omiya
station areas consistently
ranking among the mostdesirable locations to live.

Map 1: Greater Tokyo Railway Lines And Daily Passengers Per Station

KawagoeOmiya

Kita-Senju
Ikebukuro

Nishi-Funabashi• Office and residential investment
volumes in Greater Tokyo
outside of the C5W amounted to
JPY874 billion in 2019, growing
34% YoY, and stands even higher
than that of the C5W in 2020.
• Preferences for locations tolive and work are likely tochange once the COVID-19
pandemic comes under control,
as companies may look to
open satellite offices in railway
hubs outside of central Tokyo
whilst residents may seek more
spacious accommodations as
more time is spent at home.
• A portion of land in WesternTokyo that was once designatedexclusively for agricultural use
may be opened up for nonagricultural development,
potentially leading to a glut ofland entering the market.

global comparisons, Tokyo is often ranked
as having the most efficient and punctual
railway system, especially considering its vasttransport capacity.
These factors are a key driver of real estatevalue in Tokyo’s periphery, making outlying
areas appealing for residents, businesses, andinvestors alike. That being said, popularity andperceptions undoubtedly vary by area. Certain
areas have stood out during the current cycle,
in some cases posting stronger growth than
the top areas in central Tokyo (Map 1).
The COVID-19 pandemic and resulting
mitigation steps will undoubtedly curb

THE WORLD’S MOST RELIABLE RAIL
NETWORK
While real estate value is unsurprisingly
concentrated in Tokyo’s central business
district, namely the central five wards of
Chiyoda, Chuo, Minato, Shinjuku, and Shibuya,
Greater Tokyo’s comprehensive rail system
grants great accessibility to outlying areas.
The key advantage of Tokyo’s rail network is
its density and globally-renowned punctuality.
Although delays certainly occur and carriages
become overcrowded during rush hour,commuters can largely count on trains arriving
on time and at a high frequency. Looking at

Chiba

Musashi-KosujiLand Prices (vs.2008)-50.0%

Yokohama

100.0%

Daily Passengers< 10,000
1,000,000
2,000,000
3,000,000
3,600,000

Major Railyway Lines
JR Chuo Rapid

Five-Year Growth0
100,000

Ikebukuro

200,000

Daily Passengers: 2,659,376

JR Chuo-Sobu

Kita-Senju
Daily Passengers: 1,274,544> 300,000

JR Keihin Tohoku
JR Saikyo
JR Shonan Shinjuku Line
JR Yamanote

Shinjuku

Metro Hibiya

Daily Passengers: 3,511,972

Metro Marunouchi
Metro Yurakucho
OdakyuSeibu Ikebukuro
Tokyu Toyoko

Shibuya

Tsukuba Express

Daily Passengers: 2,491,770

Tokyo (Station)
Shinagawa

Daily Passengers: 1,090,666

Daily Passengers: 1,028,462

Yokohama
Daily Passengers: 2,285,430

Source Ministry of Land, Infrastructure, Transport and Tourism (MLIT), Savills Research & Consultancy
Note: Lines represent segments connecting stations and are not fully representative of actual railway routes.
The points listed above represent the average of land prices for properties of all use types in the vicinity of therespective stations, as designated by MLIT in the Chika Koji survey. The Chika Koji survey has added additional
land reference points over time. Passenger data is not available for certain stations, though they have been
included in the above map to maintain consistency.

savills.co.jp/research2Tokyo Periphery and Rail Transit

railway use in the short-term, however. At
present, it is near impossible to predict how
life and work will change post-pandemic,
though some increase in the number ofpeople working from home and dispersionof personnel should be expected. Perhaps
more helpfully, flexible work schedules may
make the rush hour train more bearable forcommuters. Given these known unknowns,
this report will focus more on the trends andshifts that have been seen during the latest
upswing, whilst providing some speculation
on how the dynamic could change after the
pandemic comes under some degree of control.
GREATER TOKYO DEMOGRAPHICS
Demographic shifts are also favouring
the region at large. Indeed, while Japanis forecasted to see its total population
continue to decline over the coming decades,
the prospects for Greater Tokyo are moreencouraging, with the population of central
Tokyo and Yokohama expected to grow to2030 and beyond. In fact, forecasts produced
based on the 2015 national census appear

Even as COVID-19 has disrupted
Japan’s bullish market, opportunities
to purchase core-type assets inTokyo’s CBD remain limited, as mostowners choose to hold on to prime
property. Given the capital region’scomprehensive railway infrastructure,investors may be able to lookbeyond central Tokyo for buying
opportunities, potentially capitalising
off of shifting demand trends –especially those that may emerge
during/after the pandemic.

Map 2: Demographic Shifts By Municipality In Greater Tokyo
Forecast Population Growth From 2015 To 2030
% Growth-40.0%

Current Population (January 2020) vs. Forecast For October 2020

25.0%

% Difference
-5.0%

10.0%

Source National Institute of Population and Social Security
Research, Prefectural Governments, Savills Research & Consultancy

3

to have underestimated actual population
growth in the region, as most municipalities
of Greater Tokyo have, as of January 2020,
already exceeded the population levels
forecasted for October of this year.
Counterintuitively, some central wards ofTokyo appear to have undershot estimates.
For example, Minato Ward’s population has
underperformed its 2020 forecast by 3.8%,
while Chuo Ward has outperformed its
forecast by 7.7%. Rising housing costs and newlarge-scale developments may be driving thisshift. Although the Ginza area of Chuo Wardsees prices comparable to that of Minato, there
has been ample supply of more affordable
residential units on the artificial islands ofthe ward, namely Tsukishima, Kachidoki, andHarumi, over the past five years.
Further, the national government’s
forecasts typically do not account for
immigration. Shinjuku Ward and Toshima
Ward appear to be outperforming for thisreason, having drawn in a significant numberof foreign residents over the past decade.
Ordinances affecting housing supply also
appear to have impacted initial estimatesin Koto Ward, with restrictions on thedevelopment of family-type residences
implemented in March 2018 likely weighing
on migration to the ward, causing it tounderperform previous forecasts.
RESIDENTS LOOK OUTSIDE OF THE
C5W, BUT NOT VERY FAR
Annual surveys of residents in Greater Tokyo
have consistently revealed a similar set of
stations and train lines that rank as themost desirable areas to live. While many ofthe locations that top the list are centrallyTokyo Periphery and Rail Transit

Table 1: Most Desirable Train Lines To Live Near In The Kanto Region
RUSH HOUR CAPACITYPASSENGER(# OF TRAINS/HOUR X TRAFFIC GROWTH
TRAIN CAPACITY)
(YOY)

SUUMO
RANK

LINE

MAJOR STATIONS

1

JR Yamanote

Shibuya, Shinjuku, Ikebukuro, Ueno, Tokyo, Shinagawa

37,0000.9%

2Tokyu Toyoko

Shibuya, Nakameguro, Jiyugaoka, Musashi Kosugi, Kikuna, Yokohama

32,0000.7%

3JR Keihin Tohoku

Omiya, Urawa, Ueno, Tokyo, Shinagawa, Kawasaki, Yokohama

38,000-4JR ChuoTokyo, Yotsuya, Shinjuku, Nakano, Kichijoji, Tachikawa, Hachioji

44,0000.5%5Tokyu Denentoshi

Shibuya, Sangenjaya, Futako Tamagawa, Mizunokuchi, Chuorinkan

40,000

0.4%

6Tokyo Metro Marunouchi

Ogikubo, Shinjuku, Yotsuya, Ginza, Tokyo, Ikebukuro

23,,000

1.9%

7

Tokyo Metro Ginza

Shibuya, Omotesando, Akasaka-mitsuke, Ginza, Ueno, Asakusa

18,0000.9%

8

JR Jouban Line

Nippori, Minami-Senju, Kita-Senju, Matsudo, Kashiwa, Toride

39,000-0.8%

9Tokyo Metro Hibiya

Nakameguro, Ebisu, Roppongi, Ginza, Ueno, Kitasenju

27,000

2.4%

10

OdakyuShinjuku, Shimokitazawa, Seijogakuen-mae, Shin-Yurigaoka, Machida, Fujisawa

48,0002.2%

Source Suumo, MLIT, Savills Research & Consultancy

located, some outlying areas consistently rank
high. Yokohama Station, for example, has been
voted as the top location for three consecutive
years in an annual survey conducted by Suumo,
whilst Omiya (Saitama) has steadily climbed in
the rankings. Kichijoji, located along the Chuo
Line in Musashino City also consistently ranks
towards the top of the list.
JR Yamanote Line (Suumo Rank 1)
Major
Stations:

Shibuya, Shinjuku,
Ikebukuro, Ueno, Tokyo,
ShinagawaAverage Daily
Ridership:

4,099,000 (FY2015)

Founded in 1885 and originally connecting
Shinagawa and Akabane, the Yamanote Line hascome to serve as the anchor of Greater Tokyo’srail network. All major train and subway lines
connect to a station along the Yamanote Lineand the line itself passes through most ofcentral Tokyo’s major stations and businesscentres. Not surprisingly, the line has thehighest average daily ridership in all of Japan,
with around 4 million daily passengers.
In terms of price, stations on the northernside of the Yamanote Line, such as Ikebukuro,
generally offer a discount over stations in thesouth such as Shibuya and Ebisu (Table 2).
However, land price data reveals some shift
in the balance of value along the line, with thewestern section of the line showing stronger
growth since 2008. Average commercial land
prices around Harajuku Station, for example,
have increased by over 180% since January
2008, while those of Tamachi still remain 37%
below previous peak levels. Other stations

savills.co.jp/researchon the northern side, such as Ikebukuro andAkihabara, have seen increases of around 26%
and 48%, respectively.
Tokyu Toyoko Line (Suumo Rank 2)
Major
Stations:

Shibuya, Nakameguro,
Jiyugaoka, Musashi Kosugi,
Kikuna, Yokohama

Average Daily
Ridership:

1,166,000 (FY2015)

Connecting Shibuya to Yokohama Station, thisline is an important spoke in Tokyo’s railway
network and is not surprisingly a desirable area
to live among residents. Notable areas include
Jiyugaoka (Table 2), a cosy neighbourhoodthat has been referred to as Tokyo’s “Little
Europe” and is known for its stylish boutiques
and bakeries. Surveys indicate that the area isespecially popular among women.
Keihin Tohoku Line (Suumo Rank 3)
Major
Stations:

Omiya, Urawa, Ueno, Tokyo,
Shinagawa, Kawasaki,
Yokohama

Average Daily
Ridership:

2,975,000 (FY2015)

The Keihin Tohoku Line is a major artery
connecting Saitama, Tokyo, and Yokohama.
The line runs parallel to the Yamanote Line incentral Tokyo between Tabata and Shinagawa,and is therefore highly accessible for transfers.
Some trains on the Keihin-Tohoku Line operate
as rapid trains, which stop only at Ueno,
Akihabara, Kanda and Tokyo between Tabataand Hamamatsucho.

4

JR Chuo (Main) Line (Suumo Rank 4)
Major
Stations:

Tokyo, Yotsuya, Shinjuku,
Nakano, Kichijoji, Mitaka,Tachikawa, Hachioji

Average Daily
Ridership:

2,260,000 (FY2015)

Stations along the Chuo Line have long been
popular as residential hubs, with easy accessto central Tokyo. Indeed, it is a vitally importantline that connects Shinjuku, as well as Tokyo
Station, to Western Tokyo Prefecture (TamaRegion). The line was founded in 1889, thoughbecame more prominent after large migrations
to Western Tokyo after 1923. During the postwar period, further developments proceeded
in areas such as Mitaka City. Nearby Kichijoji
in Musashino City became a popular centre of
subculture, gaining renown for its jazz cafes
and live music houses. While retaining thisvintage character, the area has become a lively
commercial and entertainment centre, and alsooffers a large green space through InokashiraPark.
STATION SPOTLIGHT
Yokohama – Suumo Ranking 1 (1) 1
Yokohama City has been popular not only as thecommercial centre of Kanagawa Prefecture, butalso as a residential hub for Tokyo commuters
since the post-war economic boom. The city has
recently been undergoing a transformation intoa business hub, propelled by the massive Minato
Mirai 21 Development Project. Yokohama Station
itself is a major transit hub and offers convenient
access to central Tokyo and has plenty of local
amenities, all while offering a substantial
discount over most of the Tokyo 23W.
1 Indicates Suumo’s 2020 and 2019 rankings, respectively.

Tokyo Periphery and Rail Transit

Table 2: Most Desirable Train Lines To Live Near In The Kanto Region
AVERAGE LAND PRICES
AVG.
AVG. RENT(ALL PROPERTY TYPES)INCOMEFOR ONE(CITY) JPY
BEDROOM
CURRENT
THOUSAND APARTMENT (JPY/TSUBO) VS. 2013 VS. 2008

SUUMO
RANK

STATION(LINE)AVERAGEDAILYPASSENGERSAREA TYPE

CITY,
PREFECTURE

1Yokohama(Tokaido Main)

2,250,318

Commercial /Business Centre

Yokohama,
Kanagawa

4,036

97,2002,132,000

42.0%

76.1%

2

Ebisu
(JR Yamanote)

395,490

Residential /Entertainment

Shibuya,
Tokyo

8,011

226,500

2,384,714

38.3%

2.0%

3

Kichijoji(JR Chuo)

428,072

Residential /Entertainment

Musashino,
Tokyo

5,246

100,000

1,299,563

24.2%

-0.1%

4

Shinagawa(JR Yamanote)

1,002,150

Commercial /Business Centre

Minato,Tokyo

11,151

211,500

4,494,000

54.6%-11.2%

5

Meguro(JR Yamanote)

475,708

Residential

Meguro,
Tokyo

6,020

196,500

1,556,600

46.1%

9.6%

6

Shinjuku(JR Yamanote)

3,453,212

Commercial / BusinessCentre / Entertainment

Shinjuku,
Tokyo

5,186

166,100

11,006,364

64.8%

25.0%

7

Musashi Kosugi(Tokyu Toyoko)

465,749

Residential

Kawasaki,Kanagawa

3,958

104,800

992,333

24.4%

139.7%8Omiya(JR Keihin Tohoku)

682,594

Commercial /Business Centre

Saitama,
Saitama

3,879

72,300563,035

26.3%

-0.6%

9

Ikebukuro(JR Yamanote)

2,635,423

Commercial / BusinessCentre / Entertainment

Toshima,
Tokyo

4,290

130,900

3,055,824

50.2%

16.6%

10

Nakameguro(Tokyu Toyoko)

191,065

Residential

Meguro,
Tokyo

6,020

177,200

1,544,833

37.7%

-9.8%

11

Urawa
(JR Keihin Tohoku)

175,300

Residential /Government Centre

Saitama,
Saitama

3,879

73,800452,619

29.8%

19.6%

12

Shibuya(JR Yamanote)

2,456,342

Commercial / BusinessCentre / Entertainment

Shibuya,
Tokyo

8,011

213,100

7,427,059

67.3%

14.0%

13

Kamakura (Enoshima
Dentetsu)

113,364

Residential

Kamakura,
Kanagawa

4,567

94,200263,882

2.6%

-9.1%

14

Tokyo
(JR Yamanote)

1,073,553

Commercial /Business Centre

Chiyoda,
Tokyo

9,445

179,800

26,380,000

35.8%

-3.6%

15

Jiyugaoka(Tokyu Toyoko)

152,396

Residential

Meguro,
Tokyo

6,020

130,000

2,252,000

41.7%

10.6%

16

Nakano(JR Chuo Line)289,832

Commercial /Residential

Nakano,
Tokyo

4,130

116,900

1,158,333

49.2%

16.3%

17

Futako Tamagawa(Tokyu Den-en-toshi)

152,565

Commercial /Residential

Setagaya,
Tokyo

5,450

112,400

636,250

27.9%

-7.4%

18

Kitasenju(Tokyo Metro Hibiya)

1,254,598

Residential /Entertainment

Adachi,
Tokyo

3,390

90,000823,455

32.8%

33.5%

19

Tachikawa(JR Chuo)

327,806

Commercial /Residential

Tachikawa,
Tokyo

3,672

75,800711,632

16.5%

-5.2%

20

Omotesando(Tokyo Metro Ginza)

177,078

Commercial /Residential

Minato,Tokyo

11,151

257,400

2,081,667

35.0%-10.0%

Source Suumo, At Home, MLIT, Ministry of Internal Affairs, Savills Research & Consultancy
Note: Ranking based on total votes cast in Suumo’s 2017, 2018, and 2019 surveys. Train lines are presented for each station as listed by Suumo, though other train
lines connect to the above stations in most instances. Average daily passengers based on statistics published by MLIT for 2017.

Ikebukuro (Toshima) – Suumo Ranking
8 (11)
Along with Shinjuku and Shibuya, Toshima is
known as one of the “Fukutoshin” (subcentres)of the Tokyo 23W. The ward is home to
Ikebukuro Station, which hosts eight train
lines and on average sees roughly 2.6 – 2.7
million passengers pass through every day,making it the second busiest station in theworld, with passenger traffic being surpassed
only by Shinjuku. The area serves as a hub for
those coming to central Tokyo from WesternTokyo and Saitama, and provides convenient
access, to Shinjuku, Shibuya, and Yokohama
via the Fukutoshin Line and Shonan Shinjuku
Line. While Toshima may not be as prominent
as its Fukutoshin compatriots, Ikebukuro isundergoing large development that is changing
the area’s character (Map 3).

Musashi-Kosugi (Kawasaki) – Suumo
Ranking 20 (9)The area around Musashi-Kosugi Station,
located in Kawasaki City just across the riverfrom the Ota Ward, is arguably the mostprominent gem to emerge along the Tokyu
Toyoko Line in the current cycle. Once a
prominent industrial district, the area reemerged after facility closures and relocationsin the early 2000s, with factories being
replaced by a spate of tower condominiums. As
a result, average land prices around MusashiKosugi Station have increased 158% since
January 2008. This growth has been fuelled
by a rush of tower apartment completions andshopping centres, including Mitsui Fudosan’s
LaLa Terrace, Tokyu Square, and Grand TreeMusashi Kosugi, a large-scale retail facility
owned by Ito Yokado.
The station allows for access to both Tokyo

5

and Yokohama stations in under 20 minutes
via the JR Lines, and Shibuya Station in 15
minutes via the Tokyu Toyoko Line. According
to Toyo Keizai Inc. and used-condominium
marketplace Kawlu, the average sales price for
70 sq m second-hand condominiums in theMusashi-Kosugi Station area as of late 2018 wasaround JPY60 – 70 million, while the averagesale price of such condominiums was JPY51.5
million upon completion in 2008. Despite
these recent successes, the area’s reputation
took a hit in October 2019, as Typhoon Hagibis
led to extensive flooding around JR MusashiKosugi Station, damaging residential properties
including two condominium towers.
Kita-Senju (Adachi) - Suumo Ranking
22 (20)An area that perhaps offers some more value
compared to its C5W peers is Kitasenju, inTokyo Periphery and Rail Transit

MAP 3: Ikebukuro Station Area Overview

2
ii
4

i

v

3

1

A

iii

iv

B
C
3
5

D

E

LANDMARKSEST.

DEVELOPMENTSCOMP.

RETAIL HOTSPOTSA

Rikkyo University

1874

1

Q Plaza

2019

iAnimateB

Sunshine City

1978

2

Hareza Project

2020

ii

Marui

C

Metropolitan Plaza Building

1994

3

East-West Deck

TBD

iii

Otome RoadD

Minami Ikebukuro Park

2016

4

iv

Sunshine 60 Street

E

Daiya Gate Ikebukuro

2019

5

v

Yamada Denki

Ikebukuro West Gate Project Ongoing
Ikebukuro International
Campus2023

Source Public disclosures, Savills Research & Consultancy

Graph 1: Greater Tokyo Office And Residential Investment Volumes, 2010 to 2020*
Tokyo C5W

Greater Tokyo - Ex-C5W% of Japan Total (RHS)

2,500

100%
90%

2,000

80%

JPY BILLION

70%
1,500

60%
50%

1,000

40%
30%

500

20%
10%
0%

0
2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020
(YTD)

Source Real Capital Analytics, Savills Research & Consultancy*As of 14 April 2020

savills.co.jp/research

6Adachi Ward. Not only is it home to one of thebusiest train stations in Tokyo, it also scores
fairly high in Suumo’s “Most desirable places tolive in Kanto” survey. Despite this, rents are 35%
cheaper compared to Ebisu, which came secondin the survey. With a 25 minute commute tocentral Tokyo, it represents a well-located area
for those seeking value.
GREATER TOKYO INVESTMENT
According to transaction data from Real Capital
Analytics, office and residential investment
volumes in Greater Tokyo outside of the C5W
amounted to JPY874 billion in 2019, growing
34% YoY. Investment volumes in the peripheryhave been consistently high, with the ratioof periphery investment vs. central Tokyo
investment pushing higher in 2019. This is
unsurprising considering that cap rates havebecome tight in the C5W, leading investors
to look outside of Japan’s top CBD in order tomeet yield targets. Early 2020 also saw a major
ex-C5W transaction, with Goldman Sachs
acquiring the Minato Mirai Centre Buildingin Yokohama from Gaw Capital Partners inJanuary 2020 for JPY98 billion.
With the onset of COVID-19, however,property investment has largely ground to ahalt across the board. Even so, there remains

Tokyo Periphery and Rail Transit

offices closer to residential areas, such as
Omiya, could become attractive. In fact, thearea has already seen some degree of office
investment from J-REITs (Map 4). Work andlifestyle changes resulting from COVID-19
will likely facilitate this transition. (Pleaserefer to our Spotlight Report “COVID-19 andJapan Property” for further analysis on thissubject)
Japanese firms have been relatively slow
to implement teleworking initiatives and,even among those that have implemented
such measures, employees have rarely

significant dry powder allocated to AsiaPacific real estate, and Japan should remain a
key component of regional strategies. Moving
forward, investors will need to carefully
deploy capital on a case-by-case basis, seeking
out attractive deals.
POTENTIAL SHIFTS IN SUPPLY AND
DEMAND
Demand shifts resulting from COVID-19
Looking ahead, investors may want to pursue
assets in areas that could see new drivers ofdemand going forward. For example, satellite

Graph 2: Teleworking Experience Over the Past One-Year (As of July 2019)

No response

Have worked from a satellite office

Have done teleworking while in transit orvisiting clients

Have worked from home

Have not done teleworking of any kind

0%

10%

20% 30% 40% 50% 60% 70% 80%

Source Tokyo Metropolitan Government, Savills Research & Consultancy
Note: Survey conducted by the Tokyo Metropolitan Government by randomly selecting 10,000 firms in Tokyo
Prefecture with at least 30 full-time employees, and randomly selecting two employees from each firm
(20,000 total). Of these, 3,798 people submitted responses.

Map 4: J-REIT Acquisitions In Greater Tokyo Since January 2008
Property Type
OfficeResidential

Omiya

Tachikawa

Hachioji

Yokohama

Source REITDB, Savills Research & Consultancy

7taken advantage of the option to do so.
A survey of workers conducted by the
Tokyo Metropolitan Government in July
2019 (Graph 2) shows that only 12.1% of
respondents had any experience working
from home over a one-year period, while only
3.4% had experience working from a satellite
office. That said, utilisation has been higher
amongst larger companies: 30.9% and 10.7%of respondents at firms with 300 or more
employees reported having had experienceteleworking from home and from a satellite
office, respectively.
This is set to change drastically in the
short-term. According to Google’s mobility
report as of 17 April, visits and length ofstay at workplaces are down 23% in Tokyo
versus the baseline period in January. The
same data shows a 14% uptick in time spentat residences – even more striking when
considering that the baseline period was the
middle of winter.
Residential unit preferences may change
if a meaningful number of companies
continue some form of remote work and/or
flexible working hours after the pandemic
subsides. Having impetus to spend moretime at home may prompt residents toprioritise larger spaces with better amenities
as opposed to proximity to train stations,which has recently been a key selling point for
properties outside of the central five wards.
Potential development ofagricultural land “Seisan Ryokuchi”
In a bid to protect the environment andpreserve green land in areas surroundinglarge cities, the government granted very
generous tax breaks to owners of speciallydesignated agricultural land in the nineties
if they commit to long-term agricultural use.
Known as “seisan ryokuchi”, these tracts ofland, designated exclusively for agriculture,
were strictly regulated and, as a result,private property development has been
disincentivised.
To be entitled to these generous benefits,among other requirements, it was necessary
for the plot of land to exceed 500 sq m aswell as 30 year commitment for agriculturaluse. Once all requirements were satisfied,the landowner was granted the benefits for a
30-year period (in most cases to 2022), after
which they would have to decide whether
or not to retain the land’s special status. If
retaining the seisan ryokuchi status, theowner would then be entitled to the benefits
on a 10-year rolling basis, as long as the initialrequirements were still satisfied. Otherwise,
these tax benefits would be lost – though theland could then be disposed of or used for
non-agricultural developments.
In Tokyo, these pieces of protected land
are mainly located in the Western wards ofthe 23W and the Tama Region (Map 5). It is
worth noting, however, that within theseareas, properties located near stations havelargely been developed already and are inTokyo Periphery and Rail Transit

Map 5: Seisan Ryokuchi by City And Ward In Tokyo Prefecture

Ome
Itabashi

KiyoseHamuraNerimaFussa

AkirunoKodairaTachikawaAkishima

Adachi
Kita
Katsushika

Nishi-tokyo
NakanoMusashino

Kokubunji

Koganei

MitakaEdogawa

Suginami

Fuchu
Hachioji

Hino

Chofu
Tama

Inagi

Setagaya

MachidaOta

Hectares
0.3

251.8

Source MLIT, Savills Research & Consultancy

high demand. Therefore, favourable locations
are relatively insulated from the potential glutof emerging land, highlighting the need forprospective investors to be selective.
OUTLOOK
As redevelopment proceeds across Tokyo,
areas of preference for living and working willundoubtedly shift; the COVID-19 pandemic mayvery well accelerate or reverse some of thesetrends. Central Tokyo will continue to hostthe top business hubs and should thus remain
attractive for residents and businesses who
can afford higher premiums. However, somedegree of dispersion beyond the Tokyo C5W
is likely.
In the short-term, given the economic
slowdown resulting from the pandemic,

cheaper locations on the periphery – which
would ideally still have strong access tocentral Tokyo – should look more attractive
to both residents and businesses who arefacing a financial squeeze. In the mediumto-long term, the further implementation offlexible work styles including teleworking andrevised business continuity planning amongcorporates may accelerate a dispersion of life
and work outside of central Tokyo. This newworkstyle will prompt Japan Inc. to further
digitise and thereby increase productivity,
possibly leading to more significant wage
increases, which have thus far been lacklustre.
Residents spending more time at home
may want more spacious accommodations – aluxury all but a few can afford in the central
wards. More flexible work arrangements

may allow more people to avoid overcrowded
rush-hour trains, arguably the greatest pain
point for those commuting from the periphery.
Businesses may find it necessary to disperse
office locations somewhat to avoid the now
apparent risks of overcrowding in the CBD.
Such dispersion is likely to occur along key
railway hubs and new peripheral sub-centres
may emerge as a result.
Looking further ahead, despite thedemographic outlook appearing somewhat
more positive than initially forecasted, anumber of municipalities in Greater Tokyo
will see populations decline over the coming
decade. Station-front areas should, however,continue to see migration and new hubs will
likely crop up outside of central Tokyo as
development proceeds throughout the region.

For more information about this report, please contact us
Savills Japan

Savills Research

Christian Mancini
CEO, Asia Pacific(Ex. Greater China)+81 3 6777 5150
cmancini@savills.co.jp

Tetsuya Kaneko
Director, Head of Research& Consultancy, Japan+81 3 6777 5192
tkaneko@savills.co.jp

Matthew D’Elia
Manager, Research &Consultancy, Japan+81 3 6777 5179
mdelia@savills.co.jp

Simon Smith
Senior Director
Asia Pacific+852 2842 4573
ssmith@savills.com.hk

Savills plc: Savills plc is a global real estate services provider listed on the London Stock Exchange. We have an international network of more than 600 offices and associates throughout the Americas, the UK,continental Europe, Asia Pacific, Africa and the Middle East, offering a broad range of specialist advisory, management and transactional services to clients all over the world. This report is for general informative
purposes only. It may not be published, reproduced or quoted in part or in whole, nor may it be used as a basis for any contract, prospectus, agreement or other document without prior consent. While every effort has
been made to ensure its accuracy, Savills accepts no liability whatsoever for any direct or consequential loss arising from its use. The content is strictly copyright and reproduction of the whole or part of it in any form
is prohibited without written permission from Savills Research.